Does Increased Enforcement Raise the Revenue?
By John Van Horn
The headline read “SFMTA Faces … Deficit, Looks to Parking Enforcement.” It seemed simple to the San Francisco Municipal Transportation Agency’s Board of Directors: Increase parking enforcement and increase revenue. Maybe so, maybe not.
Parking Today spoke to a number of parking officials in cities across the country and received a lot of off-the-record comments. These parking pros want to keep their jobs, so we agreed to keep their comments on “deep background.” The conversation broadened into many aspects of on-street collection and enforcement.
On face value, it would seem that installing equipment that takes credit cards (such as in San Francisco) would decrease the incidence of parking violations. People naturally have a tendency to max out the time on the meter, rather than take a risk of the citation.
This flies in the face of the goal of the pols in San Francisco.
However, there are mitigating circumstances. If space-monitoring sensors are used, as in SF, then enforcement can be better allocated, and the number of citations written could actually increase or, at a minimum, maintain the same level.
The experience in Los Angeles (see sidebar) is that the switch to credit card meters meant more “up-time” and, therefore, more revenue collection. Naturally, the number of meters that were “down” before the change would affect the revenue increase.
Most parking enforcement managers tell PT that a very small number of violations are ticketed. They agree that 10% is a valid figure. So if the number of citations written was increased to 20% or 25% of the violations, then citation revenue may remain the same or increase.
It also was pointed out that the type of violation may change. Although the number of meter violations may decrease, the number of “red zone” violations may increase, and typically these command a higher fine, thus increasing the revenue.
“When changing the way money is collected,” one manager said, “you need to take into consideration how the money is collected.”
One city decided to raise parking rates, but did it in tandem with the installation of credit card readers. The citation revenue went down (about 18%), but the actual revenue collected from parking went up. The fee increase handled the problem.
If you work in parking, reality is that you generate revenue for more than the parking program, one senior official said. “You can talk all day long about the philosophical policy concerns of how money is collected for the city, but in the end, the revenue is needed, and parking is a viable source. Is using citations good policy for general fund revenue? I’m not sure. However, it makes no difference when the money is needed; it is taken.”
If you use on-street sensors, you can not only direct your enforcement activity, but also “reset” the meters when motorists leave the spaces. That can mean a substantial revenue increase. Many drivers believe that finding a meter with time on it is like winning the lottery, and they complain loudly when meters are reset upon leaving.
“Look at it this way,” another industry veteran said. “If you rent a car for a week and get the weekly rate but return it a day early, does the next person in line get a free day? I don’t think so. It’s the same philosophy.”
“There are other costs to installing credit card meters,” noted another pro. “The bank card fees and ongoing maintenance costs are substantial. However, there are other benefits. You aren’t processing literally tons of quarters (banks charge a fee for that), plus we free up personnel who would be clearing meters to ensure they were up and working. The new machines are reliable, and the more that they are up, the more they collect.”
“Raising rates can be difficult,” one parking official said. “That extra dime or quarter can cause a mini revolt in some communities. Chicago experienced a major problem when they leased out their on-street operations because of a substantial increase in rates. However, the rate hike might have been impossible without the lease agreement.”
Politics plays a very large part in the decision on whether to raise on-street rates. Currently, Los Angeles is going through a major upheaval, because it is feared by merchants and others that leasing out garages will lead to substantial rate increases.
PT’s sources tell us that sometimes the rate increase is possible only with a lease agreement. “Once the lease is in place,” one said, “the politics of the increase is mitigated. Private companies can make these decisions that could not have been made by the parking department or the city council.”
In an article on page 24 in this issue, Don Shoup talks about “graduated” parking fines. First ticket may be a warning or only $10, but the second might be $50, and the third $150. People who make one mistake get a pass; scofflaws pay the price.
One problem that our parking managers saw with this was the potential for a reduction in revenue.
“Wow! It sounds great. Our city is considering such a plan. What wonderful PR. But it could mean a big reduction in revenue. Scofflaws might change their behavior, stop breaking the rules, and we will write a lot fewer tickets.”
This goes to the policy side of parking. What is it all about? Are the rules there to make the parking more available, as a utility such as electricity or water, or are they there to generate revenue for cash strapped cities? Should cities get their revenue from a small number of scofflaws, or more generally through taxes?
“Well, you can look at it from the point of view that those who break the rules pay for those who don’t. At that point, you have to be sure you don’t set the fines too high to change all the behavior, or the fiscal cost will be too high.”
But isn’t that what you are trying to do?
“Still have to generate the revenue.”
How about broken meters? What is good policy? Should people be allowed to park at these meters? Should they call in?
“Meters with multiple ways to pay should still be in force. If the coin slot is jammed but the credit card slot works, they should pay. It’s like going into a shoe store and the credit card machine is down. They don’t just give you the shoes.”
Unfortunately, parkers often don’t look at it that way. It seems to go back to the “parking should be free” mantra, and whenever or whatever you charge is too much.
“That’s a conversation you need to have with the mayor,” one parking manager told PT. “They set policy, we enforce it.”
John Van Horn is founder, editor and publisher of Parking Today magazine.
The LA Experience
According to a report made to the Los Angeles City Council, the city’s new 10,000 individual credit card meters have resulted in a:
• 50% increase in revenue.
• 75% reduction in contested meter citations.
• 55% reduction in complaints to the city’s “Meter Hotline.”
• 99% up-time and operating rate.
Much of this increase is due to the 99% up-time rate and the city’s rule that if the machine won’t accept coins, then a card must be used (or vice versa) or the driver must move to another space. This resulted in an increase in citations as none were issued at broken meters.
Article Abstract from August, 2011